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Analyst ponders impact of MW2 'Stimulus Package' pricing and success
On IndustryGamers, EEDAR analyst Jesse Divnich examines the economic impact of Modern Warfare 2's "Stimulus Package" on consumers, business and the future of DLC. He notes that "as an economist" he's glad a publisher tested the boundaries of DLC pricing, as millions of consumers (around 25 percent of MW2 owners) proved willing to drop $15 on the map pack. He points out that "if consumers deem it unfair for companies to overcharge their products, it is similarly unfair for businesses to unknowingly under-price their products." However, Divnich wonders about the long-term implications of continued high-priced MW2 DLC, should Activision go that route. He suggests that consumers could leave the Call of Duty "circle" for games like Battlefield: Bad Company 2, where the cost for new content over time appears to be lower. He also posits that "consumers could avoid the next iteration of the Call of Duty franchise, since again, cost of dedicated ownership is now much higher." Divnich explains that the current "situation" between Infinity Ward and Activision may cloud core consumer purchases of future DLC and the franchise, as well, compared to if everything had remained -- on the surface, at least -- hunky-dory.
GDC 2010: EEDAR on Achievements, user behavior
EEDAR hosted a two part panel at GDC this year. In the second half of the panel -- you can read about the first half here -- Jesse Divnich presented the results of an Xbox Live Achievement study the firm recently conducted. The info was pulled from a pool of 32 million data points -- provided by MyGamerCard.net -- and centered on a random sampling of 100 different Xbox 360 games. Probably the most interesting statistic that Divnich dropped: An average of only 4 percent of Xbox gamers actually managed to earn all of the achievements in any given game. When focusing only on major, "AAA" titles, that number drops to 2 percent. Meanwhile, less than 10 percent of consumers get more than 80 percent of Achievements. Furthermore, Divnich noted that only 27 percent of users manage to unlock more than 50 percent of Achievements. Divnich concluded his talk by saying that developers should learn as much as possible from Achievements. He advised studios to use them as motivational tool for users noting that the number of unlocked Achievements tends to drop off at around 30 percent. He added that gamers who manage to unlock at least 80 percent of Achievements are typically motivated to unlock the remaining 20 percent. Finally, Divnich stated that developers can use Achievements as a form of direct user feedback. By observing which Achievements are unlocked, developers can see the parts of a game that players enjoy. This, in turn, can help developers decide what to focus on in the sequel. Beyond that, Achievement monitoring could even help them decide whether to make a sequel at all.
GDC 2010: EEDAR talks new IP strategy
Game industry analysis firm EEDAR dropped some interesting statistics during its GDC panel this year. The first half of the presentation -- hosted by EEDAR president Geoffrey Zatkin -- concerned new intellectual property in the games industry. According to Zatkin, the amount of new IP released has increased slightly over the last three years. Specifically, it was up to 22 percent in 2009, up from 17 percent in 2006. However, breaking it down by console, Zatkin stated that new IP currently comprises 27 percent of Wii software, while that number drops to 17 percent on the PS3 and 360. He added that certain genres see very few original properties, particularly fighting games. Furthermore, the relationship between new IP and ESRB ratings is different on various platforms. Most new IP on the Wii tends to be rated E, while new properties on 360 and PS3 tend to be rated T or M. Using data like this, Zatkin said, publishers can decide what sort of games to release on which platforms. The question, according to Zatkin, is whether publishers decide to follow the trends or fill the "holes" in their portfolios by releasing titles in underrepresented areas (any pubs up for a mature Wii fighting game?). Zatkin also discussed the best time for publishers to release new properties. A bar graph illustrated a slight trend away from the industry crowding all its releases into the holiday shopping season, though it still accounted for 37 percent of releases in 2009. Zatkin also pointed out that many publishers release their major titles at the end of their fiscal quarters. The lesson for publishers looking to release new (and risky) properties? Keep your games out of the fourth quarter and try to release them in the second month of any given fiscal quarter.
Analysts: No cause for concern over reported unpaid Modern Warfare 2 bonuses
Following the departures of two Infinity Ward executives, a related story has gained significant traction and deserves some attention. BingeGamer reports that the development studio "has yet to be paid a single dime in royalties for Modern Warfare 2," ostensibly to be paid by publisher Activision. As Infinity Ward is a wholly-owned Activision studio, we turned to some leading industry analysts to explain what appears to be a private contractual matter. EEDAR analyst Jesse Divnich tells Joystiq, "I couldn't speak to what the royalty agreement between Activision and Infinity Ward is. If royalties haven't been paid out yet, I wouldn't consider that too alarming. The game has only been out for a little over 90 days. Additionally, it is common to see royalty agreements based upon factors such as hitting release date, review scores (a.k.a. 'Metacritic Clauses') or revenue milestones. I think if you just replace the word 'royalties' with 'bonus' it should make some more sense." Wedbush Morgan's Michael Pachter explains, "I don't know the nature of [Infinity Ward's] contract, but my bonus is paid after year-end (in February), and theirs is likely the same. The idea that they haven't been paid 'yet' is not all that surprising. The year just closed, and the final SEC documents were filed yesterday." He continues, "IW sold itself to Activision back in 2004, Activision owns the [Call of Duty] IP, and the guys leaving were employees under some kind of contract. Activision appears to believe that they have breached this contract, and may or may not be justified in withholding bonuses." Check out Pachter and Divnich's full analyses after the break. [Editor's note: This post has been altered to reflect updates in the Infinity Ward leadership shakeup.]
EEDAR: Mass Effect 2 best-selling January release ever
EEDAR vice president and analyst Jesse Divnich has sent out some surprising facts about game sales during the month of January. Well, okay -- it isn't exactly chart shattering that a crapton (that's 572,000) of Mass Effect 2 units were sold last month, but, according to EEDAR's calculations, the game managed to become the best-selling January release of all time in just six days of retail availability. Even with such a small window to achieve the record, Mass Effect 2 completely destroyed the previous record-holder: Poor, poor NFL Street for PS2 (with 325,000 units in sales, for the old record). Though Mass Effect 2 certainly set a high bar for the quarter, Divnich's report suggests that game sales aren't likely to decline with blockbusters like Final Fantasy XIII and God of War III just around the corner. His firm also promises to closely watch sales of Dante's Inferno -- if the game can can beat its expected sales target of 500,000 units over the next three months, it means that those outlandish PR stunts were effective and we can look forward to more cake arms and $200 checks once Purgatorio is inevitably announced. Awesome.
EEDAR: No More Heroes 2 sold less than 30k in January
It's sad to admit it, but we never expect any third-party "core" Wii game to sell well -- regardless of its quality or the hype behind it. Lowered expectations mean that when such a title doesn't absolutely tank, it's great news! And the sales of No More Heroes 2: Desperate Struggle, as reported by EEDAR in its "Retail Sales Review for January," fall somewhere in that "didn't absolutely tank" area, especially since the game was on sale for less than a week in January. (There's certainly room for a few more people to go out and pick it up, though.) "No More Heroes 2: Desperate Struggle has scored top reviews averaging a 90 (out of 100) since its release," EEDAR analyst Jesse Divnich said in the EEDAR report. "However, sales came less than 30,000 units for its first week (January 26, 2010 release)." Divinich compared the lowish sales to Dead Space Extraction and MadWorld, both of which also had "low marketing budgets, which is likely the wrong strategy to use when attempting to target the Wii consumer, even if you are targeting the 'core' market." When is that ever the right strategy?
Accessory makers had a big 2009, to the tune of $5 billion
There's a stuffy business piece over on Yahoo! News about how gaming accessory makers are rolling in teh moneyz -- at least $5 billion last year, according to EEDAR analyst Jessie Divnich. Rather than offer up a bunch of boring figures on which plastic guitar sold best, or who had the most popular Wiimote charging solution, we figured we'd introduce you to some of the very items that have made accessories such a big business over the past few years. Firstly, there's the Trauma Center Kit, a favorite of home surgeons and people who like to look ridiculous while playing games. Next up, the gun. Or, more specifically, just "gun." We'd be remiss to neglect one of our favorite faux firearms styled after an aquatic predator. For those who prefer reptiles, this sensor bar holder was hit or misss. And finally, we leave you with actual video footage of some of the fine products that make up this staggeringly lucrative industry in action. We hope you've had a ball.
Analysts: Gamers won't care about iPad
Now that the gaming public at large has had a chance to discuss Apple's iPad, it's for the analysts to weigh in. Speaking with IndustryGamers, prior to the iPad announcement, Wedbush Morgan analyst Michael Pachter intimated that he didn't expect the tablet set the gaming world on fire. "It's going to have limited appeal to gamers, although some people will buy it obviously," said Pachter. He elaborated that the device could affect Nintendo's DS, though. In the end, however, Pachter expects the iPad to benefit the iPod Touch, thanks to a "cross-fertilization of games" between the platforms. Meanwhile, EEDAR's Jesse Divnich, speaking after the iPad announcement, said that iPad games would likely have to cost $20 for publishers to "treat the iPad as a serious gaming device." Divnich noted to the low barrier of entry on the iPad / iPod as the sticking point, saying that big publishers have a hard time competing with indie developers that can sell games at rock-bottom prices. He further elaborated that the competition on the App Store stifles big publisher profits, which in turn stifles innovation. "The lower the profit potential, the less resources and desires there are to push gaming standards ahead." Frankly, that point of view seems to neglect that many low-budget indie games do push gaming standards ahead, but that's another post altogether. The point is, it looks like gamers may not be flocking to the iPad. Honestly, we could have told you that, as the above snippet from Joystiq's company chatroom demonstrates.
We got our wish: New console IP up 106% since 2007
If we've learned anything from the latest "Divnich Debrief" on IndustryGamers, it's to be careful what we wish for. Video game anthropologist analyst Jesse Divnich has crunched the numbers and formed a surprising statistic: 106 percent -- the percentage increase in the number of new console game properties introduced from 2007 to 2009 (61 new IPs in 2007 compared to 126 in 2009). One hundred and twenty-six! Surprised? We are, considering that we've pined for new game experiences, as we've stocked our shelves with sequels these past few years; all those 2s, 3s and 4s -- heck, we've got a spot reserved for a "13" in March. Still, we'd like to think our collections owe more to exquisite taste than a compulsive habit to collect them all. After all, as Divnich points out, of those 126 new properties introduced last year, not one received an aggregate review score of over 90 percent. The lesson, as Divnich tells it, is that publishers are barbarians (see, the image does make sense). In other words, when we the consumers stop buying properties worn barren by those plundering publishers, they turn to mass-producing new IP, in search of a hit, which is then quickly ravaged (think: sequel, sequel, sequel -- in short succession) as the cycle repeats itself. The solution, Divnich poses? Simple -- for publishers to consider Blizzard's calm approach (at least it's worked on the PC platform) and farm their prize properties with sustainability in mind. We suppose that makes it our job to suffer excruciatingly long droughts, while keeping the faith. Who wants to join us for the seasonal StarCraft Dance?
Nintendo DS2 to be announced this year, released not too long after?
Nintendo has already been talking up what a Nintendo DS successor might look like, so it wouldn't come as too much of a shock if we saw the device in the near term. That's what EEDAR analyst Jesse Divnich believes, anyway. He has a research note out saying that Nintendo will be releasing a new handheld in the next 15 months, and make the announcement within the next eight months. The reasons are numerous, including the need to bone up on online distribution, rampant piracy, and just the regular march of technology that Nintendo is never unaware of -- just ask the routinely trounced handheld competition. Unfortunately, there's nothing "solid" in this report as far as we can tell, so we'll have to wait for some "unnamed sources" or our cousin's friend's dad's barber to weigh in and tell us how it really is.
EEDAR predicts DS2 will be announced this year
In a recent report, EEDAR analyst Jesse Divnich has predicted that Nintendo will announce its next handheld -- let's call it the DS2 -- within the next eight months. Furthermore, Divnich believes that the product will be released within fifteen months. "one of the biggest reasons for Nintendo's success in the handheld market is their ability to remove opportunity gaps for competitors to enter," says Divnich, citing the early release of the DS, which effectively stymied the chances for the PSP a year later. Other reasons to release new hardware include the increasing threat of piracy and the specter of declining support from publishers (Ubisoft, for example, has announced plans to scale back support for Nintendo platforms). Frankly, the DS hardware is getting a little long in the tooth; as such, it's not too hard to imagine Nintendo ramping up for the release of its inevitable successor. Hell, even Nintendo President Satoru Iwata has been talking about it. Or has he?
More games and players in 2009, but fewer sales
The gaming industry wasn't immune to the economic turmoil around the globe in 2009, but it appears that more people are playing games -- even if they aren't necessarily buying "core" games. USA Today has a year-end piece noting that 2008's record $21.3 billion in US sales isn't in the cards this year, with NPD data revealing that, as of November, consumers bought 12.2 million consoles, compared to 14.2 million the year prior. An optimist could argue that'll be made up for in software sales, but we'll need to wait until January for that data. EEDAR's Jesse Divnich reiterated that "the big games are getting bigger," indicating that blockbuster, marketed games are siphoning more sales from everyone else. Then again, casual games like Farmville on Facebook had 65 million players. A complication here is that retail sales may be declining (which is tracked by organizations like NPD), but we don't really know what goes on in closed digital distribution systems. The actual industry sales figures may be debatable, but we'll take the rise of casual games as a sign of demographic diversity within the industry.
More games released in 2009 than in 2008, barely
Some people have decried the current calendar year for being light on high-quality games -- but they can't frown upon the quantity of titles released in 2009. According to Gamespot, the latest EEDAR GamePulse report reveals that 1,099 games were released to retail outlets throughout the year -- a slight increase over the 1,092 games which hit the market in 2008. That's not exactly good news -- according to the report, more games (such as Modern Warfare 2) are becoming permanent staples on store shelves, limiting the amount of free space for other new titles. Also, the amount of expendable cash folks have to spend on these games is dwindling. But ... but let's not think about that, okay? It's Christmas. Happy thoughts, you guys.
EEDAR: 2010 delays smart decision for game publishers
With so many publishers intentionally pushing games out of the holiday season, Q1 2010 is shaping up to be one of the most competitive release windows in the history of gaming. Bayonetta, Army of Two, Dark Void, MAG, BioShock 2, Dante's Inferno, Lost Planet 2, Heavy Rain, Aliens Vs Predator, Final Fantasy XIII, Battlefield: Bad Company 2, God of War III, Mass Effect 2, Splinter Cell Conviction, No More Heroes 2, and Red Steel 2 are just some of the games to come out in the first three months of 2010. Doesn't it seem as though the industry is preparing for yet another cannibalistic quarter, akin to the holiday? EEDAR's Jesse Divnich doesn't necessarily think so. He argues that "publishers who purposely diverted their AAA holiday titles into 2010 made the proper decision and will likely realize stronger sales with a post-holiday release than a holiday release." And the reasoning? The combination of Mario, Modern Warfare 2 and Assassin's Creed 2 predictably impacted the sales of all other games. "High quality games are selling less units in the 2009 holiday season compared to 2008," Divinich noted by analyzing the sales of games with Metacritic scores of 80 and above. Still, we can't help but look at the first paragraph with awe. Can our wallets even survive an onslaught of that magnitude? We have an easy solution for publishers: there's an entire "summer" season to consider when releasing games.
Divnich: Wii can't help but win this generation
Though it's always risky to call a winner before the race is over, EEDAR analyst Jesse Divnich figures there's basically no chance that the best-selling home console of this generation will be anything but the Nintendo Wii -- even if Nintendo were to suffer an unusually bad few years, and its competitors were to enjoy unusually good years. Here's Divnich's "worst-case scenario": "For the Wii, let us assume a 25% decline in sales next year," he postulates, "followed by two years of 30% declines, and a 50% decline in 2013. For the Xbox 360, we'll assume a 10% increase through 2012, and a 30% decline in 2013. For the PlayStation 3, a 25% increase next year, followed by two years of 10% increases and a 30% decline in 2013." Even with those unlikely numbers, Divnich says, the Wii comes out selling about as much as the PS2 has, and claims victory over the Xbox 360 and PS3. The reality will, of course, be much more complicated than the projection. Divnich notes that Nintendo is likely to release some kind of new hardware, either in the form of a bundle or an upgraded system, that will affect sales; "Additionally, we know that Sony plans to support the PS3 through 2016, which means there are three additional years where Sony could gain a tremendous amount of ground on the Wii and Xbox 360 by being able to offer an affordable Blu-ray player to consumers (very similar to the late success the PS2 had by being able to offer consumers an incredibly cheap video game system/DVD player)." Still, it seems that the only chance for a second-place Wii is for the DS to eventually become large enough to count as a home console.
Commercial success dependent on 'more than just quality,' Divnich suggests
Pictured: A successful commercial Speaking during a presentation at the recent Montreal International Game Summit (as covered by Edge), EEDAR Director of Analyst Services Jesse Divnich highlighted a tenuous connection between game review scores and commercial success. In the case of Nintendo's DS, Divnich is quoted as saying "scores don't matter." But do they matter among a more dedicated gaming audience? "When we did compare Xbox 360 and PlayStation 3 only games, we did, to no surprise, find that review scores highly correlated to sales," Divnich told Joystiq. "However, marketing correlation was still just a tad bit more." According to EEDAR's research, marketing has played the "more crucial role" with DS games and, to some degree, Wii games (a point Nintendo's Reggie Fils-Aime seems to agree on). While emphasizing that his aim was not to dismiss the value of critical evaluation, Divnich suggested that marketing plays a more persuasive role in what has become a burgeoning industry. "Video games are now a mass marketed product, it is a product that targets all major demographics, very similar to television or movies or any other sector within the entertainment division." While Joystiq readers may lock out the din of marketing as they tap the F5 key and anxiously wait for review embargoes to lift, the industry has grown to encompass people who aren't as exposed to the likes of Metacritic. It seems that being informed takes precedence over being entertained -- at least until you start playing the game. "Quality does matter," concluded Divnich, "but marketing matters just a little bit more."
EEDAR: Blame low industry sales on casual gamers
EEDAR analyst Jesse Divnich recently told Industry Gamers that the low sales reported by NPD in October can be attributed mainly to casual gamers. Specifically, he placed the blame on "non-traditional and casual gamers who have failed to make follow-up purchases." Conversely, Divnich said that core game sales have been "quite healthy" throughout 2009. So, what can drive casual gamers back to the cash register? "it will take the introduction of some new style of gameplay or peripheral before we see a resurgence in the casual and non-traditional markets," said Divnich, noting that his company expects a new DS to arrive in 2010 (presumably a next generation model, not another redesign). In addition, Divnich believes that Microsoft's Project Natal could reinvigorate interest in motion-controlled gaming among both core and casual gamers. Divnich also reiterated his belief that the Wii will remain on top for the rest of the year. He also thinks the PS3 could outsell the Xbox 360 over the holidays. He did note, however, that PS3 sales are "declining much faster post-price drop than the Xbx 360," suggesting that it's too early to claim any definite winners in the long run.
EEDAR predicts Nintendo dominance, weak GTA and Brutal Legend performance in October sales
EEDAR has released its predictions for October sales charts in North America. Analyst Jesse Divnich expects year-over-year declines for every console except the PS3 -- but also expects the Wii to regain its place at the lead, with an estimated 600,000 units sold. Divnich predicts that the Wii will remain at the top for the rest of the year -- based partly on New Super Mario Bros. Wii. Divnich expects the title to lose initially to Modern Warfare 2 in November, but pick up sales in the holidays and become the best-selling game of the year. Other games expected to pick up in the holidays include Grand Theft Auto: Episodes from Liberty City and Brutal Legend. Divnich expects both games to underperform in October (coming in at under 100,000 and 300,000 units, respectively), but to receive significant boosts in the holidays. Demon's Souls, however, may exceed expectations. Divnich estimates that Atlus's punishing RPG sold 100,000 copies in October.
Analyst: 'Sony was saved by the success of the Wii'
If you haven't heard, the PlayStation Wii is so successful, it pretty much prints money. Wait, Sony didn't make the Wii? Then how did the market analysts of DFC Intelligence come to the conclusion that "Sony was saved by the success of the Wii?" According to DFC, the Wii's mainstream appeal forced Microsoft into a successful, but not entirely dominant position. "The main danger Sony faced was that the Xbox 360 would become embedded as the system of choice. Instead consumers flocked to the Nintendo Wii. The Xbox 360 had solid sales, but they have not been enough to give Microsoft anywhere near a breakout market position," the report explains. Should enthusiasm for the Wii wane this holiday season, the recent price drop, coupled with with impending release of God of War III, finally positions the PS3 as a viable choice for mainstream consumers, the report notes. EEDAR's Jesse Divnich agrees, pointing out that Sony can finally utilize its leverage from the previous generation. "People who purchase a PS2 are more likely to purchase a PS3 in the future. Consumers, believe it or not, are pretty loyal." Three years after the launch of the PS3, Blu-ray is also finally becoming a marketable feature for mainstream consumers, the report argues. "This holiday season Blu-ray movies are finally getting a major focus at retail ... Blu-ray clearly now becomes a strong selling point for the PlayStation 3." Undoubtedly, SCEA will create an ad that focuses on this aspect of the system that "only does everything." While DFC's report comes off as incredibly bullish, it's understandable to see why there's some doubt over Sony's ability to capitalize on the moment. Let's not forget, this is a company that managed to fall from first to last place in the course of a year. "The cards are in Sony's favor and now is the time to make the most of them ... Now is the time for Sony to shine ... or else." [Via CVG] Source - Is it Time for the PlayStation 3 to Shine? Source - How the venerable PlayStation 2 made it to 9 years old
Nielsen and EEDAR join forces to provide 'unprecedented' game tracking data
Stat-tracking firms The Nielsen Company and Electronic Entertainment Design and Research (EEDAR) are teaming up to deliver "unprecedented insight into the video games industry." Nielsen's data, which has brought plenty of controversy on its own, will be integrated into EEDAR's GamePulse subscription service. Nielsen gathers its data from 1,200 "active gamers" through a weekly survey, while EEDAR data mines and organizes using various categories.The data will be combined beginning in March of 2010 and be available to both Nielsen Video Game Tracking and EEDAR subscribers. This may not mean much to the average gamer, but to stat-obsessed executives and folks in marketing departments, this is like licking triple-chocolate ice cream covered in bacon and honey.
